Providing a critical friend

It’s well over half a century since London could boast of being truly at the forefront of international trade, but that’s changing.

ClientDP World, the European Investment Bank and commercial banks

ExpertiseLenders' technical advisory

We acted as lenders’ technical advisor for the two-phase development of London Gateway Port. Our experts brought technical due diligence of the development and operation of this multidiscipline project, which, in time, will comprise 2700m of quay, six deep-water berths with depth alongside of 17m, 24 new-vessel class quay cranes and a capacity of 3.5M TEU.

Our team was tasked with developing borrower and lender agreements, including advising on commercial risk, outturn cost and contingency, project controls, and definition of output based performance requirements. Phase 1 funding was agreed at the end of 2011. We also provide monthly to quarterly monitoring and reporting, seeing the mega project through construction and now overseeing operation. Berths 1, 2 and 3 were completed by the end of 2016, our services will continue until 2024 when investment payback is complete.

The port is being developed by DP World, which has put much of its own money into the project, with additional funding from nine commercial banks and the European Investment Bank.

Such a project would conventionally be undertaken by a principal delivery partner, working under an engineering, procurement and construction contract and taking all development risk. But the special purpose company created to act as client for the project, London Gateway Port Limited, wanted to develop the project with its own project management team and have the freedom to procure contracts and manage the interfaces itself.

“It was an unusual challenge,” explains project director Robert Wilson. “The lenders were potentially exposed to numerous large commercial contacts. Reassurance and trust were therefore of the utmost importance for the lenders. We worked closely with the sponsor, acting as critical friend to find the best route during construction. We drew in particular expertise from across our business to supplement the core financial advisory team, providing the technical insight and know-how required to assure that the best design and delivery solutions were being put forward, and translating that into easy-to-understand language."

“It’s a good example of how we can marry up hard and soft skills. We were retained for the next phases, which is always a sign of confidence.”